Steel & Tube, watchdog appeal fine

An appeal and counter appeal to a record $1.88million fine have been lodged in court. Pictured is mesh stored on a construction site. Photo: Getty Images
An appeal and counter appeal to a record $1.88million fine have been lodged in court. Pictured is mesh stored on a construction site. Photo: Getty Images
Two separate court appeals were launched yesterday over Steel & Tube's record $1.88 million fine last month - the Commerce Commission is appealing the sentence, while the steel manufacturer and distributor wants the fine reduced.

The sentence was imposed by Judge W. Cathcart in the Auckland District Court after Steel & Tube pleaded guilty to false and misleading representations about its steel mesh products.

Steel & Tube announced yesterday it had carefully reviewed the judge's decision and believed the fine was excessive, and would launch an appeal.

The Commerce Commission said yesterday Steel & Tube had pleaded guilty to 24 charges under the Fair Trading Act.

The charges covered 482 batches of steel mesh, or about 480,000 sheets of mesh, that Steel & Tube sold for about $24 million. The company failed to properly age and test the mesh product, and batch test certificates claimed the mesh had been independently tested, when it had not.

The commission was appealing the sentence on the basis Judge Cathcart erred when sentencing the company. It said he failed to properly attribute the knowledge of a Steel & Tube manager to the company and did not adequately take into account the size of Steel & Tube and the potential for it to gain from its conduct.

In Steel & Tube's counter appeal, it noted the Structural Engineering Society had indicated homeowners should not be concerned about mesh safety, and the Insurance Council also reassured homeowners they should not be ''unduly concerned'' about insurance claims on homes containing its steel mesh.

Both the commission and Steel & Tube declined further comment on their respective appeals, now that the matters were again before the courts.

The $1.88 million fine is the highest handed down under the Fair Trading Act. Lawyers for the commission initially called for a fine of between $3.8 million and $4.6 million as a starting point, but the judge started at $2.9 million, then discounted to reflect Steel & Tube's co-operation and early guilty plea, BusinessDesk reported.

Other commission mesh investigations at the same time led to Fletcher Steel being issued with a warning and United Steel and Pacific Steel (NZ) receiving compliance advice.

Timber King and NZ Steel Distributor were sentenced and fined $400,950 after pleading guilty to seven charges and Brilliance International Ltd was fined $540,000 after pleading guilty to 20 charges. There remain 59 charges against Euro Corporation before the courts.

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